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What are the taxes for companies and individuals?

November 07, 2018

In the United Arab Emirates (UAE), there are generally no federal taxes on personal income, capital gains, inheritance, or corporate profits. However, there are some exceptions and considerations to be aware of:

  1. Corporate Taxes: As of my last update, there is no federal corporate tax in the UAE. However, companies engaged in certain activities, such as oil exploration and production and branches of foreign banks, may be subject to taxes at the emirate level. Additionally, companies operating in free zones may be subject to specific tax regulations set by the respective free zone authorities.
  2. Value Added Tax (VAT): In 2018, the UAE implemented a 5% value-added tax (VAT) on the sale of goods and services. VAT applies to most goods and services, including food, electronics, entertainment, and professional services. Certain goods and services may be exempt from VAT, such as residential property rentals, local transportation, and certain healthcare services.
  3. Customs Duties: While not technically a tax, customs duties are levied on certain imported goods entering the UAE. The rates vary depending on the type of goods and their country of origin.
  4. Excise Tax: The UAE also imposes excise taxes on specific goods deemed to be harmful to human health or the environment, such as tobacco products, sugary drinks, and energy drinks. Excise tax rates vary depending on the type of product.
  5. Individual Taxes: There is no personal income tax on salaries or wages earned by individuals in the UAE. This means that individuals generally do not pay taxes on their employment income. However, expatriates may be subject to taxes in their home countries based on their citizenship or residency status.

It’s important to note that tax regulations in the UAE are subject to change, and businesses and individuals should stay informed about any updates or amendments to tax laws. Additionally, while there may be no federal taxes in the UAE, companies and individuals are still required to comply with relevant regulatory requirements and may incur fees for licenses, permits, and other administrative processes.

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